S Hoskins v HMRC

In S Hoskins v HMRC (TC01972 – 21 May) a contractor (H) failed to deduct tax from payments made to a subcontractor (F). H subsequently requested HMRC to make a direction under Income Tax (Construction Industry Scheme) Regulations SI 2005/2045 reg 9. HMRC refused to make such a direction and H appealed. The First-tier Tribunal dismissed his appeal finding that he had failed to take ‘reasonable care’ to comply with the regulations.

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Why it matters: SI 2005/2045 reg 9 provides that where a contractor has not deducted tax  from an amount paid to a subcontractor HMRC may issue a direction absolving the contractor from having to pay the tax if specific circumstances apply. Regulation 9(3) provides that such a direction may be made if the contractor satisfies HMRC that he took reasonable care to comply with...